The explosive popularity of the Internet combined with advances in digital and personal communications have contributed to an expanding, dynamic and viable commercial global market. Large investments in personal communications, and in particular to mobile telecommunications and devices, has provided consumers numerous means to conduct commercial transactions in a non-traditional way. Namely, personal communication devices, are beginning to supplement and replace traditional “cash and carry” or “credit and carry” commercial transactions by providing an electronic and often “on-line” means for conducting the same transaction.
As is often the case, technological advancements are released for public use before regulation can be enacted to govern the new developments and issues which surface. Commercial transactions occurring in a non-traditional sense, e.g., using personal communication devices, are no exception to this regulation back-log. One notable problem with the development of using personal communication devices to conduct commercial transactions, is the difficulty or inability to determine and collect transactional fees and/or taxes associated with the event. For instance, in the traditional sense of commercial transactions, applicable taxes are calculated based on a stationary location of the vendor and are collected from the purchaser at the time of the sale, typically during a face-to-face sales event. However, commercial transactions occurring via a personal computer or mobile computing device, are currently exempt from regulation controlling taxation due in part to extreme difficulty of tax settlement in a “virtual” environment.
Due to the increasing number of sales occurring in the non-traditional way and the tremendous loss of tax revenue due to, for example, Internet sales, it is believed that the tax-exempt status for such sales will soon cease or undergo changes. New regulation may soon be enacted which imposes taxes on Internet purchases of hard goods as well as “virtual goods” such as software and music from companies outside the taxing authority's jurisdiction. Companies selling to consumers within the jurisdiction of taxing authorities will desire a method to determine those taxes, even though the consumer may be in another city, state, province or country. Accordingly, a system and method to create a trusted, centralized directory that can provide the location or effective location of servers that provides the appropriate tax calculations is needed.
In a similar sense and until recently, mobile telecommunication service, e.g., cellular phone service, was a tax-exempt service due in part to the difficulty of determining taxes on a non-stationary event, e.g., mobile telephone call. However, the Mobile Telecommunications Sourcing Act of 2000 now enables State and local governments to tax mobile telecommunication device users for the service. The Act provides that all charges for mobile telecommunications services that are provided by the user's home service provider are subjected to tax, charge or fee by a taxing authority. The authority, however, can only be within the user's primary place of use, regardless of where the mobile telecommunication services originate, terminate, or pass through. In other words, the Act attempts to provide some form of tax collection, but due to the highly mobile nature of cellular phone use, only attaches tax to the user's primary place of use, i.e., a billing address. However, by virtue of the mobile use of the phone, many calls are placed outside the boundaries of the user's “primary place” and occur within another taxing jurisdiction. Yet taxes may only be collected by the taxing jurisdiction of the primary place and the State and/or local government where the call is actually taking place will not receive a taxable contribution.
It is believed that regulation will approach technology in the area of personal communication devices and legislation will be enacted to provide a means for collecting transactional fees and/or taxes for events occurring on the personal communication device. Accordingly, a system and method for determining the applicable taxable authorities, calculating the taxes, and accounting for the taxes in commercial transactions and personal communication occurring on a personal communication device is needed.